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TMI Blog2019 (2) TMI 2061X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs.3,63,445/- on account of interest paid on loans stating that interest paid on loan held to be genuine. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering that the addition was made on the basis of information received from DIT(Inv.) that a search and seizure operation was carried out in the case of Shri Pravin Kumar Jain He was engaged in providing accommodation entries in the form of unsecured loans /deposits/ purchases entries to a large number of parties through various Benami concerns. The assessee was one of the beneficiary of accommodation entries of Rs.1,40,00,000/- from various parties managed by Shri Pravin Kumar Jain and Associates, 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering that Shri Pravin Kumar Jain have admitted on oath before the DIT (lnv.) authorities that the assesses is one of the beneficiary of accommodation entries of Rs.1,40,00,000/-. 5. On the facts and in the circumstance a of the case and in law, the Ld. CIT(A) has erred in not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e postal authorities with the remark 'not known', 'left'. In response to a query raised by the AO to explain why the above amount should not be added as bogus unsecured loans, the assessee filed a reply dated 25.02.2016 stating that all the transactions with the parties were done through regular banking channels and the loans were duly repaid in next assessment year. As proof of the same the assessee filed copies of confirmations of the party along with income tax return, financial statement and bank statements. However, the AO was not convinced with the said reply filed by the assessee for the reason that the notices issued by him u/s 133(6) were returned back by the postal authorities as 'unserved'. The AO placed reliance on the statement of Shri Pravin Kumar Jain recorded u/s 132(4) in which he admitted that through various dummy directors on papers, had controlled, operated and managed large number of concerns, which were not carrying out any business activities. Similar reliance was placed by him on the statement of Shri Uttam Hinger and Shri Nilesh Parmar. Therefore, the AO brought to tax the unsecured loans of Rs.1,40,00,000/- as unexplained cash credit u/s 68 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mall amount. The Tribunal, taking into account bank statements of lender companies and fact that the assessee failed to produce these lenders for verification held that the alleged loan transactions were not genuine. In appeal, the Hon'ble High Court dismissed the appeal filed by the assessee on the reason that the Tribunal had given elaborate reasons to come to the conclusion that entire loan transaction was not genuine. The SLP filed by the assessee has since been dismissed by the Hon'ble Supreme Court as reported in (2018) 97 taxmann.com 398 (SC). In the case of Lal Chand Yadav (supra), it is held that where in respect of loan taken from various creditors, the assessee brought on record their confirmations, since creditors were earning meager income and they failed to produce any cogent and reliable evidence of source of their income, the impugned addition made u/s 68 was to be confirmed. In the said case, during the relevant year, the assessee borrowed money from 9 creditors. In course of assessment, 7 creditors were produced before the AO who confirmed the fact of granting loan to the assessee. 7.1 Now we turn to the decisions relied on by the Ld. counsel. In the case of Smt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming the action of Assessing Officer in reopening the assessment u/s 147 of the Income Tax Act, 1961, without considering the facts and circumstances of the case. 10. In the instant case, as mentioned earlier, the AO reopened the assessment processed u/s 143(1) by issuing notice u/s 148 dated 05.02.2015. Against the ground raised by the assessee on re-opening, the Ld. CIT(A) dismissed it on the ground that only prima facie belief is sufficient for reopening the assessment. 11. Before us, the Ld. counsel of the assessee relies on the decision in Pr. CIT v. M/s Shodiman Investment Pvt. Ltd. (ITA No. 1297 of 2015) by Bombay High Court, Fiat India Automobiles Ltd. v. Virendra Singh (2012) 27 taxmann.com 37 (Bom) and M/s Indorama Software Solution Ltd. v. ITO (ITA No. 5290/M/2011 for AY 2003-04). On the other hand, the Ld. DR relies on the decision in Jayant Security & Finance Ltd.(2018) 91 taxmann.com 181 (Guj.) 12. We have heard the rival submissions and perused the relevant materials on record. In the case of M/s Shodiman Investments Pvt. Ltd. (supra), the return of income filed by the assessee was processed u/s 143(1). Thereafter, on 30.03.2010, the AO issued notice u/s 148 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing on record in the instant case which would invite the applicability of Fiat India Automobiles Ltd. (supra) and Software Solution Ltd. (Supra) 12.1 We find that in the instant case, the AO has linked the material to connect that the assessee has indulged in activities which give rise to reason to believe that income chargeable to tax has escaped assessment. Also the recorded reasons mention the amount which according to the AO has escaped assessment. Therefore, the decision in M/s Shodiman Investments Pvt. Ltd. (supra) is distinguishable from the present case. As mentioned earlier, the AO reopened the assessment which was processed u/s 143(1) of the Act. In the case of ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. 291 ITR 500. (supra), the Hon'ble Supreme Court held that intimation u/s 143(1)(a) is not an assessment and held valid the notice issued u/s 148. In the case of Kone Elevator India P. Ltd. v. ITO 340 ITR 454 (Mad), CIT v. Ideal Garden Complex P. Ltd. 340 ITR 609 (Mad), it is held that in the case of return of income processed u/s 143(1), the only condition to be satisfied for reopening is taxable income has escaped assessment and the assessee's plea that no fres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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